View more on these topics

Give clients a great deal on the web

By last October, one-third of UK households were estimated to be using the internet to buy goods and services.

It is anticipated that this will have a huge impact on the online financial services industry, which could be worth up to £50bn by 2005.

A host of financial service providers have sprung up on the web, eager to grab market share. These comprise both rebranded established providers, such as Co-op&#39s Smile and Prudential&#39s Egg, and independent start-ups such as First-E and

Most of the web services target the consumer directly and many IFAs may feel threatened by this, fearing that the accessibility of the internet will erode their position as the first point of reference for investors.

However, IFAs should take care not to overlook the opportunities offered by the internet. Some of these, such as online broking, may be integrated seamlessly into existing offerings provided by the IFA.

Increasing numbers of IFAs are strengthening their presence on the web, recognising that it enables them to be accessible continuously to customers. Some IFAs have even established quasi-online trading services which enable their customers to deal shares through an email service. The request is emailed to the IFA/broker who then executes the trade.

However, the trend towards online broking – there are now around 303,000 online trading accounts – and, in particular, discount execution-only broking, is opening up opportunities for IFAs to broaden and improve the service they offer.

Execution-only brokers provide a simple service – they process trades. It is a service which complements rather than competes with the advisory service provided.

Although direct equity investment will account for an increasing percentage of individual portfolios, investors will never forsake alternative investment products completely. UK equity investments account for only 16.5 per cent of financial assets held by private individuals and, with bank deposits representing over 30 per cent, there is plenty of scope for growth. By working in partnership with an execution-only broker, the IFA is able to offer a wider range of services to clients while strengthening their position as the portal for all wealth management services.

Online execution-only brokers, as opposed to email or phone services, may offer the greatest advantages. For the investor, the online broker guarantees execution at the real-time displayed price. Furthermore, these services have tools which enable investors to track the value of their portfolio at any time. Such tools may be integrated easily into other wealth management monitoring services the IFA may offer Some IFAs may be reluctant to introduce clients to a service which is branded independently. Such IFAs should consider buying in a white-label service which can be rebranded under their own name. Brokers, whose income comes solely from processing trades, are likely to be interested in generating large volumes of transactions and providing such a white-label service to brokers with established brands and customer bases.


Branding – Do you want to work in partnership with an existing broker or would you rather work with a white-labelled product?

Charges – How much do you want clients to be charged for the service? Do you want to charge a flat fee or a percentage commission? Some services may price deals to accommodate your professional advice.

Portfolio tracking – Does the service enable you to keep track of how clients&#39 investments are performing? Can the broker&#39s system be easily integrated with any tools that you may already be using?

Availability of equities – How wide is the selection of shares available? Who are the market-makers used by the broker?

Transfer facilities –

How easy is it to transfer shares from accounts with other brokers? Is there an additional charge for this?

Interest rate – What rate of interest does the broker pay on cash balances in the account?

Technology – How reliable is the technology behind the broker? Does the broker have direct control over its systems or does it use a vendor product or an outsourced solution?

Security – How secure are the broker&#39s systems?


Govett rolls over to Asia

Govett Investments has introduced the Asian income and growth fund as a rollover vehicle for its emerging markets investment trust.This split capital investment trust aims to provide high income and capital growth. by investing in Asia and the Pacific region, excluding Japan. It consists of 60 per cent highly geared ordinary shares, with 40 per […]

TMO steps up its discount rate mortgage

The Mortgage Operation has introduced the exclusive triple discount mortgage.Aimed at both first time buyers and existing homeowners, the mortgage has a stepped discount of three per cent for the first three months of the mortgage, followed by a 1.25 per cent discount for the next 21 months, and then a one per cent discount […]

Smooth operator

A major headache in today&#39s life and pension industry is the constraint imposed by legacy processes and IT systems. This restricts companies when they ought to be dealing with problems such as competition from new market entrants, launching innovative new products and embracing new forms of distribution. Poor processing reduces the quality of service an […]

Wifas offers advice to Scope members

Woolwich Independent Financial Advisory Services is linking up with cerebral palsy charity Scope to provide help and financial advice to its members and supporters. Wifas is offering free initial financial planning meetings and will assist Scope&#39s fundraising by donating “a significant proportion” of its commission earnings. The IFA is also working with Scope to help […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm